Monopolistic Competition

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6 Terms

1
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Assumptions of Monopolistic Competition

no barriers to entry to exit, differentiated goods, large number of buyers and sellers

2
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Differentiated Goods

quality, product appearance, product features

3
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Long Run Equilibrium

firms make zero economic profit

4
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Efficient Scale

the production quantity that minimizes ATC

5
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Comparisons with Perfect Competition

firms produce at the efficient scale

6
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Comparisons with Monopolistc Competition

there is excess capacity